Creating and communicating a total reward culture

Across the UK organisations spend millions in developing and offering benefits to their employees. However when 65% of employees admit to not fully understanding the value of their benefits package, investing large sums of money seems to be commercial madness. But there is a simple solution to this problem by embracing a total reward culture within your organisation and communicating the total value of an employee benefits package.

Pay freezes and bonus removals are looking unlikely to be a thing of the past, especially in the public sector, following George Osborne’s emergency budget in June. But with employees looking forward to a pay rise or a bonus as a reward for the hard work and commitment they have shown their employer, the likelihood of a year without either can have a negative result on staff engagement, morale and even productivity.

However, creating a total reward culture can help soften that blow. Developing this type of culture involves shifting the focus from the salary an employee receives to the total value of the package they are entitled to through their employer, including annual salary, employee benefits, training, development and also recognition. By doing this, and communicating the value effectively, the reassurance of knowing and appreciating their total ‘worth’ can have a huge impact on an individual’s performance, engagement and motivation.

What is total reward?

Unsurprisingly, many people confuse total reward culture and total reward statements but there is a difference. As previously mentioned, a total reward culture focuses on the value of the entire package available to an employee as well as communicating what being part of the business is all about and the value of this to the employees of the business.

Total reward statements (TRS) are a communication channels through which total package value can be detailed. Whilst many employers recognise that offering TRS is one of the most effective ways of communicating value, recent research from Edenred shows that currently only one-third of employers offer the TRS and just 26% offering them to all employees.

TRS provide instant access to information which details the exact value of their combine salary and benefits for the year. Many incorporate rewards and benefits which have a cost attached to them, as well as those that cannot be quantified for all employees. This may include the impact of flexible working for individuals or the benefits available from an on-site subsidised canteen. The most effective total reward statements also include details of the benefits that employees could apply for, should they wish, as well as details of non-financial benefits, such as training.

What are the barriers to implementing total reward?

Although many employers recognise the potential of total reward, it seems making it a reality in their organisation is a problem.

It will be no surprise that the most common reasons for total reward not being implemented are time and cost, as well as general resource. Of those who do introduce total rewards, some find it tempting to stop after the first year. For these employers, it’s often too easy to become ‘distracted’ by day to day activities and the demands of the business; for them total reward has been ticked off the ‘to do’ list and they are now free to move onto the next item.

Alistair Denton, Managing Director, Edenred (Employee Benefits) comments “These companies have missed the point. In order to gain a maximum return on investment, total reward needs to stay top of the agenda. Communicating the value of the total package should not stop and management should help drive awareness, along with HR, to facilitate success.”

The future for Total Reward

Total reward has a future in the workplace, that is clear. However, to be successful it need to become part of a planned and coordinated approach to engagement and people management. In the future years, many employers will accept that success relies on senior management, line management and employees to get on board and therefore the role of marketing to support internal communications will become more commonplace.

The role of techonology and online total reward will also become the norm as employers try to structure their rewards and benefits better and create a more joined up reward philosophy. “As more organisations take a strategic approach to the development and implementation of total reward, the opportunity to create a total reward culture will certainly follow,” Denton concludes.